Earnings Season: Great So Far

This earnings season is young, there is no question about it, but thus far I don't see many material problems with the results that have been posted. In fact, quite the opposite, thus far both EPS and revenue results are impressive across almost all company sizes and in many specific sectors. In the table below this data is displayed in a format that is very easy to observe.

EPS/Size

Growth

>=10B

20.34%

5=><10B

5.58%

2.5 =><5B

23.91%

0.5 =><2.5B

28.43%

<0.5B

9.12%

All

17.71%

Revenue/Size

Growth

>=10B

10.11%

5=><10B

4.56%

2.5 =><5B

7.68%

0.5 =><2.5B

7.72%

<0.5B

2.62%

All

8.98%

After tabulating the results of all companies of all sizes thus far the EPS growth rate as compared to the fourth quarter of 2012 is 17.71% while the revenue growth rate for all companies of all sizes is 8.98%. Thus far, these results are staggering, and they suggest that companies are growing at a rapid pace. At first glance, this seems to be true.

With a more careful eye, we can also see from a look at EPS and revenue results based on company sizes, no immediate concerns exist based on that observation either. We categorize companies based on the quarterly revenue figures posted by that respective company for the quarter, and we use that to categorize based on company size. For example, companies earning more than $10B in quarterly revenue would be included in the $10B segment in the table above.

In past quarters, our earnings evaluations have shown problems in specific sectors, and obvious shortfalls based on company sizes too, but thus far very few concerns exist in this earnings season. Arguably, consumer discretionary stocks have shortcomings, but other companies are making up for that, at least for now.

The energy sector (XLE) (trading report), for example, is a standout with overall earnings per share growth coming in at 29.62% for the stocks reporting in that sector thus far. Revenue growth for that sector is coming in at 7.17%. Our observations tell us that Noble Energy (NE) (trading report) is a standout in that sector as well with EPS growth of 64% and revenue growth of 20.8% respectively.

The information technology sector (XLK) (trading report) is also a winner based on EPS, but here revenues are coming up short. For the information technology sector as a whole, EPS growth thus far has come in at 25.22%, but revenue has only grown by 1.1% thus far. The standout in this sector is Netflix (NFLX) (trading report) with a 507% EPS growth rate and a 24.3% revenue growth rate based on the same quarter the prior year.

In conclusion, although this earnings season is young, it has gotten off to a very good start based on the raw numbers. When we compare the results of this data to the same quarter last year, both EPS and revenue growth rates are solid, but the overall data can change as this earnings season continues. At Stock Traders Daily, we will continue to monitor all stocks and sectors and categorize company sizes as always to help identify opportunities for investors both long and short.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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